Store-growth, e-commerce bring record profit at Dick's Sporting Goods
Dick's Sporting Goods Inc. said strong sales in its stores and online resulted in a nearly 21 percent jump in profit for the third quarter, sending its stock sharply higher.
The Findlay-based retailer said Tuesday it earned a record $50.1 million, or 40 cents a share, for the August-October period, compared to $41.5 million, or 33 cents a share, a year ago.
Electronic commerce soared by 46.7 percent, as Dick's added a mobile app that customers can use to make purchases, access Scorecard loyalty accounts and earn rewards through social media. Dick's also is testing a ship-from-store program in 115 stores that cuts delivery times while raising profits.
The program “allows us to utilize inventory located in our stores which was previously unavailable online” CEO Edward W. Stack said, and the result has been a “meaningful increase” in online sales.
Overall sales grew by 11.2 percent to $1.3 billion, up from $1.18 billion a year ago. Same-store sales for Dick's stores were up 3.9 percent, while Golf Galaxy sales were 3.2 percent higher.
“This was a beautiful quarter, a very clean quarter that was driven by solid gross margin expansion and good comp (same-store) growth — everything you want to see, said Canaccord Genuity analyst Camilo Lyon.
E-commerce growth during the quarter is “indicative of Dick's doing a lot better job of getting the right product online,” Lyon said.
Shares of Dick's, which said in August it expected a 36 cents-a-share profit for the third quarter, ended the day at $50.97, up $2.27, or 4.7 percent. The shares are up 38.2 percent this year.
Dick's opened 21 stores in the third quarter, and in Western Pennsylvania opened relocated stores at South Hills Village and in Cranberry.
For the fourth quarter, Dick's slightly raised the low end of its previous guidance and said it now expects earnings per share of $1.03 to $1.05.
Kim Leonard is a staff writer for Trib Total Media. She can be reached at 412-380-5606 or firstname.lastname@example.org.